Dan
Welcome to Sound Business Insights. I’m Dan Watkins. This episode is about what to do if you find out your company is being sued. This podcast is not intended to provide legal advice,
Neil
Dan, if you’re in business, it’s not really a question of if, but when you’re going to face a dispute and potentially a lawsuit. So what’s the first step that our clients or a business should take if they’re being sued?
Dan
That’s the best question you’ve ever asked me. It is totally important, absolutely necessary. And so let’s consider this podcast our ABCs of what to do. When you finally get sued, first things first, you’re going to find out about a lawsuit, either by being served or someone’s going to tell you. You’re going to find out in a multitude of ways, and that’s very important how you find out. Because when you find out there’s going to be a a time clock ticking away of action items you have to take in order to have that lawsuit go your way, the longer you wait, the worst it gets for you. So you’re going to want to find out, and I’m going to want to know as a lawyer, how did you find out? Did someone who’s suing you tell you <laugh>? Did somebody who’s a potential witness tell you, did you get some kind of letter from a lawyer? Or did you get served with a process server? All those things have implications. So once you’ve gathered yourself, organized your thoughts and you know the facts and the dates, contact a lawyer right away. What
Neil
Are the first steps that we as the Watkins firm take when our clients being faced with the potential of a dispute or lawsuit?
Dan
Well, we talk to you and we find out first things first, how you know when you knew and if you haven’t been served yet. We have everything on computer. We find out if in fact you are being sued by who and which you copy the complaint. So with a copy of the complaint before they know you have it, you have a great advantage. Mm-hmm. <affirmative>. So that’s the first thing we do. And we provide you with vital information right away before you even have to tell me the story. I’m going to give you information that you need.
Neil
So Dan, once you find out you’re being sued or you think you’re being sued, what’s the Watkins firm going to be able to do for you?
Dan
Well, you want to hire a lawyer, you want to hire the Watkins firm. But if you don’t hire us, hire somebody cuz somebody has hired a lawyer to go after you. What that means is they’ve literally hired a professional hitman to go after your money or your rights, who’s good at it. You wouldn’t play chess without knowing the rules. You wouldn’t even play checkers. And that’s what it’s like representing yourself. Going into a game where you don’t know the rules and anything you say can be used against you. You have to have a lawyer, even if it’s just to get an initial consultation about where you’re supposed to go and what you’re supposed to do. You need to get a lawyer on your side.
Neil
So Dan, the client has contacted us now and they’ve probably come in to see you. What’s the first thing we’re going to do together? When you’re talking to the client?
Dan
We’re going to listen. We’re going to listen as lawyers and we’re going to be interested and we’re going to care. What you say means more to us than you can imagine because it’s the keys to us solving your litigation problem. You provide us with detailed information, things that are bothering you, upsetting you, all those things matter to us and we’re able to organize them in such a way that every piece of information you give us turns into ammunition we can use to defend you.
Neil
Dan, you’ve talked to our client, you’ve listened to what’s going on, what’s the next step in the process?
Dan
Like I said, this is an instruction manual, the ABCs. So the next thing we’re going to do is we’re going to investigate. We’re going to provide more facts to you with investigation by reviewing documents, talking to witnesses, doing a little research. We’re going to investigate and find more evidence to support your case. We’re going to make sure that you are ready to go before they even know you’re ready to go.
Neil
And then once we’ve got the facts kind of organized, what’s the next step after that?
Dan
The next step is to treat you like a business owner. Meaning we’re no better than an auto mechanic. You come to see me, I look at your problem, I check your car out, I give you an estimate, tell you how long it’s going to take and what it’s going to cost. We do the same for your case. We look at your facts, we tell you the law and we tell you what it’s going to cost and we give you a real game plan and then you can decide if you want to hire us.
Neil
And then once they’ve decided, okay, I see where we’re going, I see what you’re going to be able to do to help, where do we go from there?
Dan
Once you hire us and we agree on a game plan or a budget that’s go get them time for us, you’re going to unleash us and we go do what we do and what we love doing, which is destroy the other side’s case. We will do everything we can to work with you. In fact, we’ll help you put your case in really good chronological order.
Neil
That’s really important.
Dan
It’s like a looking glass. When you put a case in chronological order the way we do and present it back to the client, all of a sudden all of the issues that we see just come to light. And then the client sees the issues, you see the issues and they provide you with even more and more information that destroys these issues that the other side has to deal with. So the chronology, we make our chronology as strong as possible for our client.
Neil
So once you have the chronology established and you’ve gone through it with a client and you’ve had those aha moments, what’s the next step in the process?
Dan
Well, in the litigation game, a great chronology always destroys a weaker one. And so if you have the stronger chronology with stronger facts that are all backed up and they have a weaker chronology, well we take that and we strike first. We go out there and make them swear to God under penalty of perjury that their chronology is the truth. Even though we already know our chronology will destroy their chronology, we get them to say it so they can’t take it back.
Neil
Dan, can you give me an example of how you would destroy a chronology or an example from real life?
Dan
This is the most enjoyable part of my job, <laugh>. Um, I can give you lots of examples. I’ve literally been in trial and got somebody to answer questions the way they thought the truth was and then they find out that we had documents, evidence, or witnesses that proves otherwise that their little white lie or their little slight is not going to pass. And they’ll try to say, well, I changed my mind or that’s not actually true. And I can literally say in front of a judge and a jury. So you’re testifying now under penalty of perjury. Are you lying now under penalty perjury or were you lying seven months ago under penalty of perjury? Which penalty of perjury is honest and the truth and which is not? And the other attorney will object and most judges will say no, it’s a legitimate question. And immediately you’ve just proven them to be someone who lies under penalty of perjury. Mm-hmm <affirmative>, it destroys their case. And you can do that with these chronologies we prepare over and over and over again. We use your chronology to ask our questions hoping they will lie.
Neil
And the devil’s in the details.
Dan
Exactly.
Neil
Dan, you just mentioned discovery in terms of penalty of perjury. Can you tell us a little bit about the discovery process?
Dan
Sure. In the law we call discovery, asking questions under penalty of perjury, asking for documents under penalty of perjury, asking people to admit things under penalty of perjury. So they’ll try to wiggle and squirm their way out of doing so, but we stick with it until we get answers under penalty. Perjury, meaning that’s their case. They are married to these facts and this truth. And so we use that by going after them, getting them to take a position before they get to know what our position is. If we don’t do that and we can’t always do that, then they get the advantage of trying to make their answers fit our answers. And those aren’t as, as enjoyable to me is when we catch them just going out without knowing where they’re going and then making bold statements, which they got to swallow later.
Neil
So now you’ve got them on the record and we’ve got a story that doesn’t quite match up. What’s the next step after blowing up their arguments?
Dan
Well, after we get through all this discovery back and forth and then after they finally get our answers to discovery and they know that we got them, a lot of times they can see the writing on the wall and they want to go to settlement conference or remediation. They want to stop spending money. They don’t feel as strong about their case. They’ve lost their confidence in their case because of our great chronology, the way we answered our discovery and because we cut them and a bunch of little lies are maybe a big lie. So they want to go to a mediation, a settlement conference, or just start talking settlement.
Neil
Dan, let’s say we get them to a settlement conference. What’s it like and what can our clients expect from there?
Dan
95% of all cases settle. So as a client you should ask your lawyer, how does settlement, how does mediation, how do these different vehicles we call ADR, Alternative Dispute Resolution. Yes. How do they work If 95% of cases are going to go through this process, you should know how it works and there’s a lot of strategy. So let’s talk about that. Number one, settlements. Settlements are just between lawyer to lawyer. We write letters, we make phone calls, we try to go back and forth from us to the client, back to us to opposing counsel to their client and we go back and forth and see if we can make a settlement, reach an agreement. Sometimes those don’t work because of the human nature. You’ve had disputes with people in person, correct?
Neil
Mm-hmm. <affirmative>. Absolutely.
Dan
And a lot of times you just can’t agree when it’s simple because of the emotions, right?
Neil
Yes. So you got to defend that position, right?
Dan
Even if you’re wrong, you can’t have someone look you in the eye and all of a sudden you say, yeah, I’m wrong. Those are hard words. Ask my wife, <laugh>. So there’s other processes to get people to take their emotion out of it and see the reality. The other process is a settlement conference where you have a lawyer and a client and a lawyer and a client and an experienced judge or litigator mm-hmm <affirmative> that you kind of rely on that maybe knows what they’re talking about and they’ll pass your messages back and forth. It seems like, uh, like grade school, <laugh>,
Neil
<laugh>.
Dan
But they’ll pass messages back and forth and they’ll put in their 2 cents and they’re trained to put in their 2 cents correctly, hopefully to the point where they’re saying, well I still believe in your case, but why don’t you think about this? And it calms things down. And settlement conferences work really well. Same with mediations. Uh, settlement conferences typically before the judge in court. But most of the time we have mediations, which is for a private mediator who comes in and he is paid a bunch of money and he does the same thing as a settlement conference
Neil
At each step along the way. And especially in complex matters, you may be able to resolve part of the dispute at least and agree to some portion of it as you move forward and each step that you take, you move closer to what’s the ultimate solution.
Dan
Correct. And some cases are really complex. Sometimes we’ll settle part of a case and continue to fight. I’ve even had cases where we’ll agree to go to non-binding arbitration for a day. Hmm. And he have a non-binding arbitrator give you a a ruling and then see if that prompts a settlement. There’s a lot of ways we can settle this. Here’s one, have you heard of this one? Baseball? There’s a baseball settlement tool.
Neil
No. Yeah. I’ve not heard of this tool.
Dan
It’s called baseball because you make a settlement offer, right? The other side makes a settlement offer and before the arbitrator knows or the mediator knows, the mediator puts down something on a piece of paper and saying, I think this should be the amount. And so whoever’s settlement offer is the closest wins
Neil
<laugh>.
Dan
So let’s say you say I want a hundred thousand and they say they want to pay 50,000. Yep. And you want a hundred thousand. If the mediator says, I think it should have been 80, you get the a hundred thousand.
Neil
Fascinating.
Dan
Sounds crazy. There’s a lot of different vehicles to getting people over the hump past that little barrier to get their matter resolved.
Neil
What happens in the rare cases when these settlement tools aren’t effective?
Dan
Well, it’s not over since 95% settle. A lot of them settled before trial and won’t be the last time you hear about settlement. But if you can’t settle and people are dug in, then you have to use all of the tools available to your lawyer. And those also include motions. In some situations you’re being sued for no reason and you want a motion, you want five motions filed on your behalf. We can file motions for judgment not on the pleadings after trial we can file motions for summary adjudication. We can file motions for summary judgment. We can file demurrers, we can file motions to strike. We can file motions for provisional remedies to enjoying them from doing certain things. We can file motions to stay, certain activities we can file motions to turn over assets. I mean we love filing our motions. They’re expensive but we can file them.
Dan
And sometimes the sheer burden of the number of motions we file will make them want to settle and come back to the table. And also sometimes we win our motions and the case is over. Great. And finally, right before we win our motions, a lot of times both sides want to talk settlement <laugh> because you can’t talk settlement. You whether you win or lose a motion. After the motion is decided, everything changes. All the power changes around right before a motion for summary judgment. If you’re worried you might want to settle right after it’s too late that you know you owe them money. So we have a lot of success in filing our motions. We don’t necessarily like to always do them because they cost money. Yes. But a lot of times when in there’s a lot in dispute, you want a lawyer that is well versed in filing motions and then backing them up on appeal of necessary.
Dan
I mean I’ve filed motions in state court and federal court and federal bankruptcy court and federal appellate court and state appellate court and the state supreme court and we filed motions everywhere. All kinds of motions. So, and that’s what we do as seasoned litigators. You really want a litigator that’s actually filed every kind of motion possible. You want that kind of experience going in so they know when to pull the trigger on those and when not when it’s a waste of money and when it’s not. So when you come to us, we have mostly very old attorneys with lots of experience and we’re going to talk to you about what we know as lawyers and with all of our experience we’re going to tell you what we’ve done before and how it worked out and how we think it’ll work out for you.
Neil
So before we discuss trial and arbitration, Dan, there’s a lot fewer trials nowadays than there was 10, 15, 20 years ago. Can you tell me how the experiences that the Watkins firm attorneys have that you have and that our other attorneys have gained over those years come into play versus someone who may never have been at trial or has only done one or two?
Dan
I started out as a lawyer in the eighties and there was a three and a half a year trial backlog to get to trial And Los Angeles, no one got to trial before five years. The statute of limitation is five years. And so you’d have to go in and make an appearance before a trial judge start your trial. So they maintain jurisdiction and then they’d push you back another 10 month. Hmm. So it really hard And then they came up the Discovery Reduction Act, trial Reduction Act, trial delay reduction act of the nineties. And we were getting into court in 12 months to 18 months. It was remarkable and justice was not delayed. And then the pandemic hit, it stayed 18 months to 20 months for a long time. Then the pandemic hit and now we’re back to where I started at about three years because there’s just not enough people on the jury, not enough room in the courthouse.
Dan
It’s just a big backlog of cases that couldn’t be heard for two years, three years. So there’s a big delay. And you also want an experienced lawyer who’s used to having litigation during a delay. Who put it this way, if I were to litigate like it only took 18 months with you as my client, it would cost you way too much money. We don’t need to spend $20,000 a month for three years. That’s insane <laugh>. So we need to time ourself out. Patience, don’t gouge the client and prepare this like you know, how to prepare for the trial in three years.
Neil
So Dan the net truth is, most attorneys don’t have that much experience at trial and what’s it like when they have the Watkins firm behind them on their side and all of that experience with trial and with motions and all that goes with it? Mm.
Dan
Well all the litigators here, like I said are seasoned <laugh>. Mm-hmm <affirmative>, I’ve done over 60 trials in arbitrations, maybe more tried cases in other states, tried cases in federal and state court. Literally tried to jury trials have had spectacular results unexpected by most. Yep. Enjoy it and understand not just the law but also how to pick a jury, how not to pick a jury and how to spot a rookie. Trying to pick a jury against you because the case can be over rather quickly. Watching them challenge people that would be excellent jurors for their case and kick them off the jury not knowing what they’re doing.
Neil
Experience matters.
Dan
Also knowing when not to file a motion. Lots of rookies who haven’t been to court done trials will file motion just because technically the other side did something wrong with their pleadings not knowing they’re spending their clients five or $10,000 to improve the plaintiff’s complaint because they get an automatic right to amend. So they take your motion and they fix it and now they got a better complaint against your client. Lots of things happen in trial. It’s very hard for attorneys these days to go to trial. They don’t grant too many trials that many per case. 2000 cases the judge handles and maybe, uh, 20 will go to trial 30 that year. So it’s hard to even get a trial
Neil
And to gain that experience.
Dan
Right.
Neil
So you’ve mentioned arbitration and trial. What’s the difference between the two?
Dan
An arbitration is usually someone, the parties agree to pay to hear their case as a trier of fact, which means they’re going to say, this is what I think the facts are. I don’t believe you, I believe you and this is my ruling. They’re going to impose the law on those facts and you’re going to get a judgment and it’s unappealable but it’s quicker and it’s a lot cheaper. You know, being in trial or arbitration is incredibly stressful to people.
Neil
Yes.
Dan
I mean it just buries you emotionally. That’s all you can think about. It’s all you can dream about. So even though you won’t get a jury, you might want a seasoned attorney who knows who the good and bad arbitrators in town are. Mm-hmm <affirmative> to help you pick a good or bad arbitrator. When I say good or bad, it doesn’t mean you’re going to win. It means they know up from down <laugh>, they’re not crazy. They have great experience and a great reputation. They know the law, they’re even tempered. They’ll listen to all the facts and give you the best.
Neil
If you had to put a fine point on it, what’s the primary difference in process between arbitration and a trial?
Dan
Arbitration is what they call less formal. Meaning the arbitrator has the right to let evidence in that might not be allowed in in a trial. Trials have strict rules of evidence and arbitrations. The arbitrator can give it the weight it deserves in the arbitrator’s opinion. Hmm. But in trial, especially jury trial, they have to rule on whether it’s admissible on the spot. You lay foundation for your piece of evidence and then you tell the judge we’d like to move this evidence, this document or so into evidence and the judge will hear objections and say admitted or excluded, not admitted. And so you really have to know your evidence code if you want to go to trial, you need how to lay foundation, you need how to question experts. You need to know how to do all of this while not looking stressed out, not looking flustered and not looking like you’ve never done it before. Right. I mean you’ve seen him on tv, the lawyer doesn’t is fumbling around and stuttering and coughing and sneezing and doesn’t know what’s going on and they keep objecting. Well if he’s clueless you probably think his case is probably not sound either. So you definitely want experienced trial lawyers. If you think you’re going to go to trial, get one.
Neil
What percentage of cases actually reach trial these days? Dan?
Dan
A few things come into play. They have to have a great deal in dispute. Whether it’s money or valuable items, rights, injunctions, those things can force a case into trial passion, make them go to trial. Most of the time it’s too expensive to go to trial. Yes. Then the amount of disputes is not enough and no one’s going to win when they do have enough to lose or win. And we get those. You really should go to trial. I mean you want to make that choice. A lot of times people who are in a situation, there’s enough to win or lose to go to trial. They’re pretty experienced on the other side. There are no rookies to the game. And so you want a law firm that’s also not a rookie to the game. Mm-hmm <affirmative>. And that you can go in and they know that they’re going to have a strong chance of just losing 10 times what they thought they were going to lose.
Neil
And Dan, you’ve often said that attorney’s fees are kind of like the gorilla in the room. What are the roadblocks that our clients need to be aware of and that can shape decisions regarding arbitration trial?
Dan
You’re 100% correct. Too many people forget this. That giant gorilla sitting in the corner, he’s going to eat up everything you can win or think you won and the other side only got $20,000 but here comes the attorney fee motion and they want 400,000 and it’s statutorily mandated. And you’re like, well it can’t be. It’s only 20,000. Yeah. The judge sits there and the motion, eight weeks later your attorney’s in court and they file some simple papers and then your attorney gets to argue for five minutes and the judge says thank you. And you get a, a judgment with 20,000 plus 400,000 in attorney’s fees and you’re asking yourself, where did this come from? You need to pay attention to that. We pay attention to it. It’s part of our calculation of whether we do or do not go to trial. There are so many law firms out there suing companies based on the attorney’s fees clause in the statute.
Neil
Yes. That’s their whole interest. And once you remove it,
Dan
Right, we’ve talked about this, we listen and then we help you the chronology and then we hear their chronology like we said, and then we do whatever we can to eliminate causes of action with attorney’s fees. Now some are the heart of the case and you can’t get rid of them. So you must account for them when you’re talking about settlement or valuation of the case and the risk because they’re big.
Neil
And we’ve had a robust conversation about the ABCs of what to do if you’ve been sued. And there’s a big difference between if you hire the Watkins firm versus if you go hire a large law firm that you perceive might have more strength and power. Can you just tell me what you perceive the advantages of hiring the Watkins firm for your case?
Dan
First off, we’re less expensive. We don’t charge as much per hour and we don’t have eight attorneys working on one file at a time. We’re more experienced, the larger law firm will have experienced attorneys but their associates will do most of the work, which is better because it costs a little less for the associates. But you’re going to have an experienced attorney doing all the work most of the time. Maybe an associate will help out here and there, but for the most part you’re going to be talking to somebody all the time who’s been to trial, you’re going to be talking to somebody all the time who’s had great success in the area you’re being sued in. So, and also we’ve been around a long time. I like talking about the eighties. I like telling my kids, I started being a lawyer before they had computers, <laugh>. And they laugh just like you did.
Dan
Yes. I like saying those things because it’s true and I’ve lived it and still enjoy it. And the other lawyers here are right around my age, maybe a little younger. And we like what we do. We’re not going to get any bigger. This is it. So the clients we take in, we take great pride in in getting them to uh, talk to us afterwards and say thank you for doing a good job that that makes our day. So yeah, that’s, you know, we’ve been here a long time and you get an experienced lawyer working on your entire case.
Neil
Dan, one final question. For an experienced trial attorney, how do most of our cases resolve?
Dan
That’s a silly question in our client’s favor, <laugh>, we wouldn’t do this if it wasn’t that way. I would not have a law firm if I was a 50 50 lawyer. Right. Win some, lose some. No. We want to be able to say, and we do, we make an impact. And most of our clients matters resolve in their favor, whether they paid way less than they should have or whether they recovered more than they thought they were going to one way or the other. We want our clients to go away knowing that they are better off because they came to us and they got a good result.
Neil
Thank you Dan.
Dan
Thank you. You can learn more about the Watkins firm at https://watkinsfirm.com or call our office at (858) 535-1511.